Analysis of U. S.-Pakistan Energy Cooperation Agreement: Strategic Layout and Market Opportunities

On August 6, 2025, US President Trump announced that the United States and Pakistan have finalized a trade and energy agreement, which may reshape the energy cooperation and strategic layout of the two countries. The core content of the agreement includes the participation of the United States in the development of Pakistan's oil resources and the substantial reduction of tariffs on Pakistan's exports to the United States, but the specific participation method of the United States has not yet been determined.

Pakistan's Deputy Prime Minister Ishak Dar confirmed the agreement on Platform X, which Islamabad has positioned as part of an economic relaunch plan aimed at deepening bilateral ties and addressing Pakistan's long-standing energy vulnerability.

Analysis of Pakistan's Energy Status

heavy import dependence

according to State Bank of Pakistan, Pakistan more than 85% of crude oil is imported. Crude oil is still its largest single import category. For the fiscal year ending June 2025, pakistan's crude oil import bill reaches $11.3 billion billion, accounting for nearly 1/5 of total imports this huge expenditure continues to put pressure on the state finances.

RESOURCE RESERVES AND DEVELOPMENT POTENTIAL

the latest data from the U.S. Energy Information Administration (EIA) shows that Pakistan has 9.1 billion barrels of technology can be shale oil, regular proven reserves are estimated at between 0.234 billion and 0.353 billion barrels it is at the global level. Current the average daily output of crude oil and condensate is only 60000 barrels. It is far below the daily output of more than 1 million barrels per day in neighboring India.

Natural gas development funding gap

pakistan's Energy Minister Muhammad Ali says the next decade needs to be $25 billion-$30 billion to develop 10% of estimated 235 trillion cubic feet of natural gas reserves in order to curb the decline in production and reduce dependence on LNG imports.

Investment Environment and Market Challenges

in recent years, foreign investment in Pakistan's oil and gas sector has continued to show sluggish interest, no international response to the tender for 18 land and sea exploration blocks in 2023 this reflects the challenges facing the investment environment. The Pakistani government regarded the participation of the United States as a major breakthrough, which is expected to bring much-needed financial and technical support to the field.

Significance and Prospect of Agreement

this agreement is of strategic significance for Pakistan. It will not only help reduce its dependence on energy imports, but may also attract more international investment into its energy sector. The advanced oil and gas development technology of the United States, especially shale oil extraction technology, is of great value to the development of 9.1 billion barrels of shale oil reserves in Pakistan.

However, the successful implementation of the agreement still faces challenges such as infrastructure construction, improved regulatory environment and market price fluctuations. The announcement of specific implementation details in the future will be a key factor in judging the prospects of this cooperation.